Everything is new: Law of Ukraine "On Limited and Additional Liability Companies"
June 17, 2018 was marked by the entry into force of a new legislative act. The Law of Ukraine No. 2275-VIII "On Limited and Additional Liability Companies", signed by the President on February 6 (with the exception of the second part of Article 23, which will enter into force only a year later), comes into effect.
According to this law, some provisions of the current legislation become invalid. Thus, the legal norms of the Law "On Business Societies" and certain provisions of the Civil Code, which previously regulated the mechanism for the creation and implementation of the activities of legal entities of these organizational and legal norms, are no longer valid.
The legislator provided for a more detailed delimitation of the existing norms, expanded the rights and obligations of the participants, carefully prescribed the points that were not given attention in the old law.
Below are the most significant changes:
- the quantitative limitation of LLC participants has been removed. If earlier, with an increase in the company to 100 participants, it was obliged to go through the reorganization procedure and transform itself into a joint-stock company, then from now on this can not be done;
- a description of the corporate agreement is given;
- the inheritance of the share of the deceased member of the company is regulated;
- the number of persons entitled to sign amendments to the charter is limited. Now only those participants who vote for changes can sign such documents;
- the rights of participants in the issue of the possibility of deviating from the norms of the law were expanded when approving the issue of alienation of the shares of participants and the formation by contributions of the authorized capital. All this must be approved by the charter;
- it was determined that from the end of the reporting year, the general meeting should be held within the first 6 months;
- for negative results of activities that led to bankruptcy, all members of the executive body of the company are brought to subsidiary liability;
- the necessary list of documents for mandatory storage has been established and such a storage procedure has been developed. The circle of persons responsible for this event has also been determined;
- members of the society were given the opportunity not to attend the general meeting, but to vote in absentia. In this case, their signatures are notarized.
The law clearly stipulates that LLC and ALC must amend the constituent documents to fully comply with Law 2275-VIII. In this case, the administration fee is not charged to the companies. Until all the changes are duly formalized, the statutes are valid in the part that does not conflict with the norms of the new legislative act.
Sanctions for failure to amend the charter of an LLC and ALC are not provided for by law. It can create the illusion that changes are not necessary and that there are no consequences.
However, this is a serious misconception! Based on the analysis of Part 3 of Chapter VIII of the Law, in a year, from 06/17/2019, all statutes that are not cited and drawn up properly in accordance with the provisions of the law will be invalid. This means that a company with additional or limited liability will not be able to carry out activities based on its charter, and therefore, their economic activities will be paralyzed until the state registrar properly registers all the changes. At the same time, for the changes made, it is already necessary to pay an administrative fee in the amount of 30% of the subsistence minimum for able-bodied persons, established at the beginning of the year (in 2018 - 530 UAH).
You should also take into account the mental peculiarity of our citizens, who are used to postponing most of the important things until the last. As a result, in May-June 2019, a large influx of applicants with documents that amend the constituent documents of companies (LLC and ODO) is expected in the registration authorities. This is guaranteed to lead to long queues for the submission of documents, failures in the work of the state register, and of course, an increase in the cost of services for the preparation and submission of a package of documents to the state registrar.
Therefore, Citadel Law Firm recommends not to postpone such an important matter for your business as bringing the constituent documents of the company in line with the law and make changes to the company's charter right now.